Goals and Budgeting Ms. Rendek

The importance of setting goals and maintaining them...no matter how hard it may be. Sd9Q

WHAT IS A GOAL? A goal is defined as the end result of something a person intends to acquire, achieve, do, reach, or accomplish sometime in the near or distant future Identifying goals makes decision making easier

HOW DO VALUES, NEEDS, WANTS AND GOALS RELATE TO FINANCIAL DECISIONS? Decisions Financial Decisions

TYPES OF GOALS Goals Financial goals are specific objectives to be accomplished through financial planning Education goals enable individuals to prepare for future success in the workplace Long-term goals are specified as more than one year Short-term goals are specified as less than one year

SMART GOALS SMART Goals Specific State exactly what is to be done Measurable Include how the goal can be measured Attainable Determine steps to reach the goal Realistic Do not set goals for something unrealistic Time Bound State when the goal will be met Financial and education goals should be SMART goals

SMART EDUCATIONAL GOAL Goal – “I want to attend college.” Make is SMART Specific – I want to attend a four year college Measurable – Because I want to attend a four year college, I will earn a B in algebra Attainable – Because I want to attend a four year college, I will earn a B in algebra this semester Realistic – Because I want to attend a four year college, I will earn a B in algebra this semester to prepare me for the college entrance exam Time Bound – Because I want to attend a four year college, I will earn a B in algebra this semester to prepare me for the college entrance exam when I am a junior in high school

SMART FINANCIAL GOAL Goal – I want to buy a new car – Make it SMART Specific – I plan to save for a down payment on a new car Measurable – I plan to save $5,000 for a down payment on a new car Attainable – I plan to save $5,000 for a down payment on a new car by saving $200 from every paycheck Realistic – I will save $200 from each paycheck for a down payment on a car since I usually waste the money on unnecessary items instead of saving it Time Bound – I plan to save $5,000 for a down payment on a new car by saving $200 from each paycheck for two years.

Today... Write your own SMART Goals

WHAT IS A VALUE? A value is a fundamental belief or practice about what is desirable, worthwhile, and important to an individual Family Good health Financial security A successful and/or satisfying career Honesty Helping others Religious commitment Education What are examples of values?

Make a list... What is most desirable, worthwhile, and/or important to you as an individual?

VALUES What influences a person’s values? Religious affiliations Family Teachers Friends Law Media Work/ Career Life Experiences Are your values the same as the person sitting next to you?

VALUES Values guide a person’s needs, wants, and goals Values, needs, wants, and goals influence a person’s daily decisions Decisions affect an individual’s financial situation

NEEDS vs. WANTS A need is something thought to be a necessity or essential items required for life Examples of needs: Food Water Shelter Examples of wants: Car stereo MP3 player Designer clothes A want is something unnecessary but desired or items which increase the quality of living

Maslow’s Hierarchy of Needs

NEED OR WANT? YOU DECIDE! Clothing Going to the movies Going out to eat A place to live A car/truck Security A computer Respect Cell phone Owning a vacation home Food Social connections Everyone has different interpretations of needs and wants. This is based on their personal values!

“Budget Busters” Give yourself five points if you currently have a budget. Give yourself five points if you have a checkbook. Deduct a point if you have ever bounced a check. Deduct a point if you bought something this week without comparison shopping. Give yourself a point if you bought a store brand, rather than a name brand item this week. Give yourself five points if you have a savings account. Give yourself five points if you added any money to your savings account this week. Give yourself five points if you have a method of recording what you spend.

Why Create a Budget?  Helps you determine where you are spending your money currently (and if there is any waste)  Helps you decide where to spend your money in the future.  Organized way to achieve SMART goals  Puts you in control of your financial future.

How do you currently spend your money? Make a list in your journal of your current income (where does the money you use come from? Is the amount consistent?) and what you typically spend your money on (and how much).

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Pay Yourself First Set aside money for big ticket items Avoid borrowing when you can (esp. when there are high interest rates)

How to Build a Budget 1.Decide on a time frame for tracking expenses (week, two weeks, month). 2.List all money you have coming in (income). 3.Make categories for all expenses. Consider needs vs. wants. 4.Subtract total expenses from income. 5.Study your budget and your financial plan to make sure it fits with your plans and goals

Budget Worksheet